Legislative policy environment as facilitator of foreign residential investment in Australia

Abstract

Significant changes to Australian foreign investment policy were enacted in December 2015 affecting how foreigners can purchase property. Therefore, it is timely to examine the role of legislative policy in supporting and shaping foreign investment in residential real estate. This paper contributes to the body of knowledge about the scale, extent and nature of foreign investment in residential real estate in several ways. First, legislative analysis reveals an emphasis on boosting new dwelling supply and on economic stimulus. Second, comparing Australian and international policies we show that some countries channel foreign ownership away from land and towards buildings only. Third, examining the scale of foreign investment in residential real estate since 2009 we show that while the number of foreign approvals has been rising, their value remained static. Fourth, our research reveals a changing investor profile over time in Australia. Additionally, on the Gold Coast, as in other capital cities in Australia, there has been a sectoral change with an increase in foreign property developers supplying dwelling product. The paper concludes with some key research recommendations to aid in understanding supply and demand from foreign residential property investors and the influence this has on property markets.